Questionable Auto Insurance Claims Up 25 Percent from 2010

A new report released last week shows that the volume of auto insurance claims referred to the National Insurance Crime Bureau (NICB) last year for having one or more characteristics of fraud was up about 13 percent from 2011 and up nearly 25 percent from 2010.

Last year, the NICB—which helps insurers prevent, detect and investigate illegitimate claims—was notified of about 78,000 questionable personal auto claims.

Personal car insurance has seen the most questionable claims of any insurance type in recent history, accounting for about two-thirds of all questionable claims reported to the NICB. To put it in perspective, the annual volume of questionable homeowners insurance claims has been only about one-fifth of the annual volume for auto insurance, and homeowners is the insurance type with the second-highest questionable claims volume.

Out of all the auto claims referred to the NICB, bodily injury liability was the most-abused policy type. This type of coverage pays for other people’s injuries that were the result of an accident caused by the policyholder, and it accounted for one-fifth of all questionable auto claims.

The runner-up was collision coverage, which pays for repairs to the policyholder’s own car when no one else is liable for the damages. Collision claims accounted for about 16 percent of all personal auto claims referrals.

D.C. Sees Highest Rate of Questionable Claims

Washington, D.C., had a relatively low volume of questionable claims in comparison to a place like California—which had the highest volume—but D.C. had the most questionable claims when you take the size of the population into account.

According to the NICB data, there were 83 questionable claims reported for every 100,000 members of the population in the nation’s capital. That’s 167 percent higher than the nationwide average of 31 questionable claims for every 100,000 people.

The following are the areas with the top five highest rates:

1. District of Columbia — 83 QCs per 100,000 people

2. Maryland — 73 QCs per 100,000 people

3. California — 58 QCs per 100,000 people

4. Rhode Island — 56 QCs per 100,000 people

5. Florida — 55 QCs per 100,000 people

The following are the states with the top five lowest rates:

1. North Dakota — 10 QCs per 100,000 people

2. South Dakota — 11 QCs per 100,000 people

3. Idaho — 12 QCs per 100,000 people

4. Iowa — 12 QCs per 100,000 people

5. Maine — 13 QCs per 100,000 people

About Ben Zitney
Benjamin Zitney has been covering the auto insurance industry for the past 2.5 years. Before coming to Online Auto Insurance News, he produced an extensive company history of the 30-year-old California Joint Powers Insurance Authority and worked at the Cal State Long Beach Daily Forty-Niner as a reporter, copy editor and news editor.

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